US President Donald Trump has signed an executive order for tightening the H-1B visa rules to stop its “abuse” and ensure that the visas are given to the “most- skilled or highest paid” petitioners.

President Donald Trump signs an executive order to try to bring jobs back to American workers and revamp the H-1B visa guest worker programme during a visit to the headquarters of tool manufacturer Snap-On on April 18, 2017 in Kenosha, Wisconsin. (AFP)

In the clearest signal yet on the target of the US crackdown on alleged abuse of the H-1B temporary visa programme for foreign workers, senior Trump administration officials named Indian tech firms during a briefing on the president’s executive order issued last week.

“You may know their names well, but like the top recipients of the H-1B visa are companies like Tata, Infosys, Cognizant -- they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” an official had said.

Asked why only three companies were named, the official had said, “These are the top three recipients of H-1B visas. And those three companies are companies that have an average wage for H-1B visas between $60,000 and $65,000. By contrast, the median Silicon Valley software engineer’s wage is probably around $150,000. So it just illustrates the point that I was walking you through about how H-1B visas are awarded.”

In reply to a question if he was criticising the companies, he said, “It’s a criticism of the way the H-1B visa program is run.”

On April 18, President Trump signed an executive order called “Buy American, Hire American”, directing federal agencies to review the H-1B visa programme with the aim to end fraud and abuse and ensure only the “most-skilled and highest-paid applicants” were successfully processed.

India has said H-1B was a trade and services issue and not one of immigration. Finance minister Arun Jaitely raised the matter of the review in his meetings with US commerce secretary Wilbur Ross and US treasury Wilbur Mnuchin during his visit this week to the US for the annual spring meetings of the World Bank group.

The United States grants 85,000 H-1B temporary visas to high-skilled foreigners every year — 65,000 hired from abroad and 20,000 from those enrolled in US colleges.

Due to the heavy demand for these visa, the US Citizenship and Immigration Services, which runs the programme, receives several time more applications than it can grant and uses an electronic lottery to pick the ones that will go through.

The administration believes the lottery system allows companies to game the system. “We’re going to switch away from a random lottery system in which it’s weighted toward the lowest wage workers towards a system that prioritises higher-skilled, higher-paid workers, which would make it much more difficult to use it to replace American workers.”

American critics of the programme allege it is being abused by companies to bring foreigners, who are typically on lower wages compared to the median, to displace local workers.